Buzzing Over Beer Sales

State of beer: Despite a strong outlook for 2010, U.S. beer shipments dropped by 2.2% in 2009.

Thousands of

Barrels Shipped

$2,008

2,009

Change

Anheuser-Busch

$107,025

104,800

($2,225.00)

MillerCoors

$64,500

63,300

($1,200.00)

Crown Imports

$11,583

11,000

($583.00)

Heineken USA

$8,960

8,575

($385.00)

Pabst

$5,900

5,700

($125.00)

Selling beer, wine and other adult beverages in 2010 will be lot easier when you know who it is who’s buying them.

The first thing operators need to do, according to Jerry Smith, president of J. Smith Business Consulting in Appleton, Wis., is keep an eye on demographics and econometrics.

“Convenience store retailers need to determine if they are a premium 24-pack store, or whether your customers are struggling in these economic times and are more likely to opt for a sub-premium brand,” Smith explained. “Or you might find yourself more in an inner-city situation where 23-ounce cans and 40-ounce bottles will be more valuable. It’s really important that you key in on where your sales are going so you can really maximize your set in that category.”

Beyond knowing overall demographics, honing in on every corner could provide another competitive advantage in 2010.

“The most important thing from my standpoint is meeting the needs of shoppers by store,” said John Zikias, vice president of marketing for Thorntons Inc., a 161-store chain based in Louisville, Ky. “Instead of having one planogram, or maybe a couple of planograms based on the different store sizes of your cold vaults, focus more on what the customers want or need to buy from their local stores. That might cause you to alter your assortment.”

Knowledge about the customer is key, Zikias stressed. “Tracking sales trends from each store and gathering information from the major brewers is going to be very important throughout 2010,” he said. “For example, when brewers introduce a new package they have information about the target audience for those packages. It helps to understand which consumers are most likely to buy that product. If it’s not reaching the target audience, you can’t be afraid to pull it. In this economy shelf space is too important.”

Managing AssortmentPackage size is another major consideration. “Now that the economy has shifted, people might be trading down a bit where it’s tough to get a six-pack ring,” Zikias said. “But in some stores that might be the right thing to stock because it’s a six-pack ring or nothing at all. I wouldn’t take that broadly, but the way we chose to be more successful with this category was to tailor our mix and our promotions by store and it has really worked for us.”

The data brewers have to offer may not always translate into new business, but it is a starting point for understanding today’s beer consumer. “From this starting point you can talk to your store managers and customer service reps to help understand who is really shopping in your store and what you can bundle to get them to spend more money in your stores,” Zikias said.

Additionally, beer promotions will play a significant role throughout 2010. “In our class of trade things like premium beer are consumed, typically, within three hours of being purchased. So while having promotions is important, your consumers might be looking for a deal. Having good everyday pricing is also very important,” Zikias said.

Combined with strategic pricing, Smith urged retailers to have a diverse set that includes powerhouses like Anheuser-Busch and MillerCoors, but also include imports and microbrews on the planogram to meet the needs of Hispanics and other niche beer customers.

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